Danke Apartment CEO Receives Consumption Restriction from Regulators Amid Company Bankruptcy Crisis

Rental platform Danke Apartment’s CEO Jing Gao received a high consumption restriction from the People’s Court of Minhang District on Dec. 8.

The high consumption restriction, which refines one’s access to upscale shopping scenarios, was endowed on Jing Gao due to the conflict between purchase contract conflicts between Ziwutong (Beijing) Asset Management Co., Ltd., Danke’s parent company, and Shanghai Xinqing Office Furniture Manufacturing Co., Ltd, according to the announcement published on the Enforcement Information Disclosure Website. 

The information disclosed by the People’s Court shows that the subject matter of the enforcement case exceeds as much as 5.19 million yuan. The person subject to enforcement had the ability but refused to perform the obligations determined by the effective legal document, marking his performance status as “unfulfilled.”

As the CEO of Danke, the flat rental subsidiary of Ziwutong, Jing Gao is the substantial shareholder of the parent company, holding 57% of Ziwutong’s shares. And Danke’s chief operating officer (COO) Yan Cui holds 43% of the shares. 

The restriction order came in the middle of Danke’s ongoing bankruptcy crisis.

Pandaily earlier reported that the NYSE-listed apartment rental chain has failed to give rents paid by tenants to the house owners, causing many of the landlords across the country to evict their tenants. 

Some of the tenants using the rental loans on the platform are at high stake of repaying loans while being cast out of their rented place. 

On Dec. 7, the Housing Security and Real Estate Bureau of Nanjing, the capital city of Jiangsu Province, issued a notice, saying that the government is providing tenants effected by the Danke plight with rooms free of rent for one to two months, according to the Bureau’s official WeChat public account. 

The Shenzhen government earlier also issued an emergency notice stating that local property management agencies should not be allowed to cut out Danke tenants’ water and electricity. 

Even if the government is offering such mitigation plans, Danke operated about 419,000 rooms in 13 cities cross the country including 207,000 in first-tier cities of Beijing, Shanghai and Shenzhen. 

SEE ALSO: Shares of Danke Apartment Surge 75% Despite Bankruptcy Rumor

Besides the government efforts, Ziroom, a rival platform of Danke, saw a chance of promotion. On Dec. 4, the platform issued a statement that house owners and tenants who have terminated a contract with Danke are welcomed to contact Ziroom and the latter will provide both parties with a new service contract which comes with a year free of custody service fees.